Japan: Business sentiment falls to nearly three-year low
December 14, 2012
According to the quarterly TANKAN business survey elaborated by the Bank of Japan, sentiment among large manufacturers plummeted to minus 12 points in the fourth quarter. The print was below the minus 3 points tallied in the third quarter and marked, in fact, the lowest level seen since Q1 2010. In addition, the decline exceeded market expectations that had the business sentiment index sliding to minus 10 points. A negative reading means that pessimists outnumber optimists.
Confidence in non-manufacturing industries also moderated from 8 points in the third quarter to 4 points in the fourth, which represents the lowest reading in one year.
Going forward, large enterprises in the manufacturing sector anticipate conditions will deteriorate sharply, with the forward-looking forecast index falling to minus 10 points (Q3: -3 points), its lowest level in three years. Moreover, big manufacturers see the Japanese yen trading at an average of 78.9 JPY per USD by the end of the fiscal year 2012.